Atlanta Journal Constitution
Originally posted Monday, June 4, 2018 by RODNEY HO/rho@ajc.com on his AJC Radio & TV Talk blog
Atlanta-based Cumulus Media has emerged from Chapter 11 bankruptcy protection.
The deal with creditors will allow it to cut its debt by more than $1 billion.
Its debt balance is now $1.3 billion, down from $2.34 billion, according to Cumulus.
Cumulus, the second largest radio company in the United States behind IHeartMedia, filed for bankruptcy protection in November, 2017 with a pre-packaged deal. Most - though not all - creditors liked the package.
The company owns 446 radio stations nationwide in 90 markets, including several stations in Atlanta: top 40 Q100, Rock 100.5, country station Kicks 101.5, classic hip-hop OG 97.9 and Talk 106.7.
Cumulus was weighed down by debt since it purchased Citadel Broadcasting in 2011 valued at the time for $2.5 billion. The Dickey family - which launched and ran the company for two decades - didn't invest properly in programming and labor. As a result, both radio ratings and revenues suffered. Its financial problems led to Lew and John Dickey losing control of the company in 2015.
Mary Berner, the new CEO, has reduced employee turnover from 50 percent a year to 24 percent and tangibly boosted morale. She sold the private plane the Dickeys flew and raised pay for employees.
In a business that is challenged as a whole, she has kept Cumulus finances from falling off a cliff.
For the year ended December 31, 2017, Cumulus generated a net loss of $206 million, down from $543 million a year earlier. Revenues fell slightly, from $1.141 billion in 2016 to $1.135 billion in 2017.
Josh Friedman, a legal analyst at Debtwire, a distressed research firm in New York, said there were some unsecured creditors who challenged the plan. But the New York bankruptcy judge rejected their claims.
“It looks like they’re in better position to be successful in the radio marketplace,” he said. “And it looks like this reorganization accomplishes much of what they were looking for.”
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